News Analysis

Finding a Solution to the Transit Dispute Came Down to Defining a Freeze on Pay

By STEVEN GREENHOUSE

Published: December 17, 2002

News

Analysis

In a week of bitter transit talks over money and power, the last and biggest obstacle that negotiators cleared last night was about neither. It was about an abstraction: the meaning of zero.

The Metropolitan Transportation Authority insisted, and Local 100 of the Transport Workers Union eventually agreed, that workers would get no pay raise in the first year of a three-year deal.

It is not as if the workers got no money; there would be a $1,000 one-time payment in the first year and 3 percent raises in the second and third.

If the issue was what the transportation authority could afford, it could just as easily have given workers 2 percent in each of the three years and called it a compromise.

Money was not the problem, though; symbolism was. For the authority, a wage freeze was a political imperative, a symbol of toughness and resolve in an era of tight budgets and grumpy constituents.

So insistent was management on the one-year freeze that a union adviser commented sourly that the other side was treating it almost like a religious obligation.

For management, getting the union to take a wage freeze — however obscured behind bonuses and future considerations — was an emphatic statement that it is winning the battle to get costs under control and keep union power in check.

For the union, zeros are a thumb in the eye, and union leaders worked vigorously to direct attention to other aspects of the settlement.

"Wage freezes take on great symbolic value," said Joshua Freeman, a labor-relations expert at Queens College. "Unions dislike them so much because they leave workers standing still or going backwards."

With many bus and subway passengers grumbling about a proposed fare increase, transportation authority management knew that getting the workers to accept a zero would show unmistakably that even this tough union recognized how serious the authority's budget situation was. And with a fare increase likely, riders would also see that the workers were joining them in sacrifice.

For city officials, though they were not directly involved in the transit talks, a first-year wage freeze would also be a blessing. City leaders knew that if the authority got transit workers to accept a zero, their acceptance could pressure District Council 37 and the other municipal unions to accept a first-year pay freeze in their coming contract talks. The result could save the deficit-plagued city more than $100 million.

A wage freeze would help Mayor Michael R. Bloomberg in another way. The mayor has asked a reluctant State Legislature to approve reinstating the commuter tax — for a net revenue gain for the city of $1 billion — to help close the city's prospective $6 billion budget gap. City officials acknowledge privately that getting unions' acceptance of a zero might help persuade Albany to approve a commuter tax.

Charles Brecher, research director of the Citizens Budget Commission, a business-backed watchdog group, said a wage freeze would bolster Mr. Bloomberg's goal of granting raises to city workers only if those raises were financed by productivity increases. Mr. Brecher said giving the transit workers a first-year raise might undercut that goal because it might be impossible to improve efficiency fast enough to pay for first-year raises.

"If you don't have the money, it seems to me that a wage freeze is a pretty sensible way to deal with the situation," Mr. Brecher said. "It helps save you from having to lay people off."

To Roger Toussaint, the president of the union local, a zero was especially hard to swallow because he promised the workers that he would get management to show them more respect and that he would get them a better contract than his predecessor did. His predecessor's contract, negotiated in 1999 during an era of surpluses, called for raises of 5 percent, 3 percent and 4 percent. Mr. Toussaint originally sought 8 percent each year for three years, but one consolation for him was that the authority agreed to contribute more than $280 million over three years to keep the union's health plan solvent.

Although Mr. Toussaint won the presidency overwhelmingly, with 60 percent of the vote against two opponents, he recognized that accepting a wage freeze would give factions powerful ammunition to use against him in future races. In addition, since his union was the first to go to the bargaining table in a new round of contract negotiations, he did not want to agree to terms that would make bargaining tougher for other unions.

Mr. Toussaint negotiated the new contract at a time when the city's unions are feeling especially sour about wage freezes. They remain angry about accepting a two-year wage freeze in the mid-90's, and they complain that they did not share in the prosperity of the late 90's.

Not surprisingly, other union leaders sought to distance themselves from the pay freeze accepted by the transit workers.

"I've always said that one settlement shouldn't be a pattern for everyone else," said Randi Weingarten, president of the teachers' union and chairwoman of the Municipal Labor Committee. "If a contract is good, people will say it's something that we want to follow, but if it's not good, people will say, `But our situation is totally different.' "